Wednesday, April 11, 2012

Wednesday's Editorial

TSB's last few posts have exhibited the dichotomy that continues to exists within the industry regarding the establishment  of Physician Owned Distributorships.  The challenge that the Office of the Inspector General is faced with is clearly defining the language of the Federal Anti-Kickback Law and Regulatory Safe Harbors pertaining to POD's. There are too many unanswered questions when one reads the 2011 eight page U.S. Senate Oversight Committee report.  If one analyzes the language in the One Purpose Rule, it explicitly states that, "a physician's decision as to use of one product over another cannot in any way be based on the physician receiving payment for using a particular product. Therefore, if the POD structure did lower healthcare costs, such an arrangement should not trump or justify violation of the Anti-Kickback Statute."

The Senate Oversight Committee must have a sense of urgency as this drama continues to unfold. On the face of it, POD's are entirely inconsistent with the fundamental tenets of healthcare compliance.  When words like unethical and illegal become commonplace in our everyday practice, we as a society have stooped to the lowest level.  When surgeons themselves have questioned their peers motives based on statistical facts, does one wonder why there has been an increase in POD's across the nation?  The lure of financial incentives to perform unwarranted surgeries and the lack of regulatory oversight has aided in this behavior.  

Let's be honest.  Little or no business is gained by any POD from physicians that have no affiliation with a POD.  What would be the incentive?  Many of our readers know the many "shell companies" that have been developed to deflect attention from POD's. If those participating in POD's were so confident that this is a legal model, why aren't there more Dr. Steinmann's willing to openly discuss their model?  How many POD's are willing to be transparent?  And if one believes that this model is truly driving down the cost of delivering healthcare by eliminating the middleman only to  replace them in the food chain, why not contribute to the necessary oversight and regulations that are desperately needed?  Rather than debate what is ethical or illegal here are TSB's recommendations;

  • Physician Investors in a POD must recuse themselves from any Product Evaluation Committee due to a potential conflict of interest.
  • Physician Investors in a POD may only compete vis-a-vis a"closed bid" process to eliminate the potential advantage garnered from inside information.  If its all about driving down the cost, it shouldn't really matter whose product one uses considering the state of the art.
  • The OIG should call for complete transparency/disclosure in equity ownership identifying all investors and officers involved with a POD.
  • The OIG should have the right to audit the POD's surgical output on a year to year basis.
  • Comprehensive guidelines to Medicare and Medicaid patients to minimize the potential of violating the Federal Anti-Kick Back Laws. 

So in closing, TSB must pose the following questions, what are the moral limits of the medical device marketplace?  Are coercion or corruption acceptable?  Are market exchanges voluntary when someone can exhibit undue influence based on their position?  The POD business model has a degrading effect on the market valuation of goods and services.  Does the POD create a fair bargaining condition?  Are POD's really just looking to fix background market conditions within which market exchanges take place?  These are the questions that must be answered by the Government.  TSB wants to know what the solutions really are, because in hindsight if you are depending upon the Federal Government to step in and regulate there'll be a cold day in hell before that ever happens.



 

19 comments:

  1. TSB this post made absolutely no sense at all. I think you are splitting hairs here. You have beaten down POD's and now its time to move onto something else. While I am not in favor at all for the POD model, its where this crazy business we are in is at now. We either need to adapt to it, make changes or move on!

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    1. Adapt? That's like telling people to "adapt" to the mafia. Free and fair trade no longer exists. Surgeons are not putting products in patients based on quality, pricing(charged to the patient), or service. Instead the decision is made for them to find the cheapest Korean knock off and then charge a price the hospital finds tolerable. This stunts any medical advancements, kills U.S jobs, causes over treating and over diagnosing of patients. Hospitals cannot negotiate pricing because the surgeon, i.e. the decision maker, is also the sales rep. The one thing they have done for my business is stopped the bottom from falling out in my pricing. With the surgeons also being sales reps, the price will not drop further. Instead the surgeon/decision maker/sales rep pockets additional money while fusing more people and levels. The laws were written for this to never happen. It's wrong and fundamentally goes against everything we are SUPPOSE to stand for as Americans. It's time to reset our moral comprises people. It's just WRONG.

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  2. It is headed towards the following - Independent practice associations (or IPAs)an association of independent physicians

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  3. Interesting, care to elucidate?

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  4. TSB...
    I agree that any opportunity you have to tract readers (those that have lost business to competitors and nothing better to do than to listen and spread gossip on this blog) needs to be diverted to other areas like why insurance companies are ruining our surgeons ability to provide care for patients, why are we letting hospitals continue to rake in greater profits from price pressures why still getting the same reimbursements as always, why are we not concerned about medical device companies facing extra tax subsidies while ASP continues to shrink and employees may lose their jobs, etc., etc., but you continue to try and attract worthless readers to the same beat down subject when I last quit reading this blog till today from 6 months ago. Come on TSB, Orthoworld is kicking your tuckish with far meaningful subject matter than the same ole same ole POD sour grapes that is much more involved than you or others will ever be able to handle when it all washes out.

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    1. Amen. This name of this blog should be changed to "POD Watch."

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    2. 4:31 could'nt agree with you more brother!!!

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  5. All but 2 of the posts above are from POD employees or surgeons involved in POD's.

    Obvious troll is obvious..... I give them a 3 for effort.

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  6. Orthoworld is beating TSB LMAO look on their traffic its definitely a threat give us a break how shallow are you PODS

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  7. Hey John is that you or Shirley or Julie that are writing those ridiculous statements on this blog? Go back and cut and paste some more Google Press Releases. I would bet that TSB has more activity on this blog than that ridiculous website of yours.

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  8. TSB if that is the guidlines that we should use for the creation of a POD, I say hell yea, that is easy to do. The more POD's the better off we all are.

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  9. Ask Dr. Alan Brown in the pacific NW if his POD model has lowered health care costs, or just increased utilization while lining his pockets.

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  10. TSB love the last paragraph, might be too intellectual for 2:23 to ponder especially if they are consumed just making money. I get it maybe its time some others did too. Keep on rocking in the free world.

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    1. 2:23 here...too intellectual for me? And HELL YEA to making money! This is what we are in the biz for...making money isn't? If not, go be a teacher or work flipping burgers 3:34! I said I am NOT in favor of the POD model but that doesn't change that the editorial was boring! Free enterprise!!

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    2. 3:34 sounds like he/she gotten their ass handed to them one to many times!

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  11. 4:31 God forbid that any corporation have to pay additional taxes. Will it stunt the growth of the industry? Probably not, considering that there hasn't been a breakthrough technology in years, and that the market is glutted with commodity products. But, let's pity the poor surgeons who aren't making the same kind of money that they use to. Welcome to the human race. Just like the rest of us, make adjustments in your personal lives. If you have four kids in private schools and are bitching to me that their tuition is killing you, your wife wants a new summer house, and you are driving in your $85,000 MB, I can really feel the pain. Why should they be any different, because they are surgeons? If surgeons feel that they are maligned, or have been targeted as the fall guy, stand up to the insurance industry and your hospital administrators, but don't take it out on the reps. It's a cop out and those that use their surgical bully pulpit know it. Blaming a salesperson for driving up the cost of delivering healthcare is ridiculous considering that they are nothing more than a cog in a much larger wheel. TSB would bet that the surgeons complaining the most are the ones that are the greediest. As for Orthoworld, whenever they are ready to compare their stats and readers against this blog, let's get it on because talk is cheap.

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  12. Question from a new rep to the industry having trouble identifying PODs from small crappy companies. Who are the most common in the CA market?

    Thanks

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    1. Call your manager, don't broadcast your ignorance (not stupidity, necessarily) to the whole world. Or simply google all of the company names.

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    2. The POD's are the ones whose customers won't talk to you. Those customers, in case you haven't figured this out yet, are your competitive reps for those companies. Screwy huh? Welcome to Spine!!

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